Pre-market update (updated 7:30am eastern):
- European markets are trading -0.8% lower.
- Asian markets traded -0.8% lower.
- US futures are trading moderately lower.
Economic reports due out (all times are eastern): Import and Export Prices (8:30am), Treasury Budget (2pm)
Technical Outlook (SPX):
- Despite opening lower, SPX managed to finish higher for a fifth straight day, the first time that has occurred since 3/7-3/12.
- However, the gains that are being made are sluggish at best, and without much fanfare.
- Volume continues to drop unbelievably lower on SPX.
- Setting up for a pullback at the very least heading into next week as buyers seem to be lacking conviction at these levels.
- Market remains well overbought on multiple time frames.
- For a while, the rally off of the 6/4 lows looked more like a bear-flag forming, but no longer with the strength in the market over the last month.
- If the SPX is to finish again in the green today, it would be the first 6-day rally since the 12/7/10 – 12/14/10 – to say the least it hasn’t happened in a while.
- SPX poised to make a move to 1422 and challenge the year’s highs.
- Biggest news so far this week, technically, has been the SPX breaking out of the descending trend-line off of the 4/2 highs (as noted below).
- It’s not uncommon to see large market rallies going into an incumbent re-election.
- 30-min chart has us primarily trading in a sideways channel.
- If you look at the 4 previous higher-highs in the market since the 6/4 bottom, then one could conclude that we’ve reached another temporary top, and are prime for another pullback.
- One area of concern is the 3 large gaps off of the 6/4 lows that remain unfilled, including 6/6, 7/26, 8/3
- At this point, uptrend support rests at 1354.
- SPX trading above all significant moving averages (10,20,50,200).
- VIX remains under 16.
- If another sell-off were to ensue, watch for a break and close below 1354 for a new lower-low in the market.
- Downside reversal signal still remains intact on the SharePlanner Reversal Indicator.
My Opinions & Trades:
- Went short HE yesterday at $28.44.
- Day-traded AHS yesterday and sold at $6.45 from 6.46 for a $0.01 loss.
- Bought OSK at $23.74.
- Going to consider any sell-off as opportunities to buy stocks on the cheap. Dip buying should be the norm until a lower-low is put in place.
- Remain long RHT at $56.19, AIG at $32.46, MDT at 38.15 and AMZN at $233.90. Short BRO at $25.65
Charts:
